House prices in Spain increased by 4.1% in the year to March 2023

House prices in Spain increased by 4.1% in the year to March 2023

According to the Sociedad de Tasación report, the price of new housing and secondary market housing in Spain increased by 4.1% year-on-year by the end of March 2023. The average figure reached 1,801 euros per square meter.

Consuelo Villanueva, head of the company's department for working with large clients and institutional investors, pointed to the continued growth of average prices in the country, even despite a noticeable slowdown in the market. The Sociedad de Tasación study shows that for 2023, the semi-annual price growth rate shows an increase of 1.8%. In 2022, the semi-annual growth rate was 2.1%.

The five regions of Spain with the highest rate of price growth by March included the community of Madrid (+5.8%), the Balearic Islands (+5.4%), Baskonia (+5.2%), Cantabria (+5.2%) and the community of Valencia (+4.9%). Some of the most modest rates were shown by La Rioja (+2.9%), Extremadura (+3.1%), Castile and Leon (+3.2%), Asturias (+3.4%) and Catalonia (+3.6%).

In absolute terms, the highest average price per square meter at the national level was recorded in the community of Madrid (2,845 euros), followed by Catalonia (2,505 euros) and Baskonia (2,425 euros). One of the cheapest regions is Extremadura and Castilla la Mancha, which showed 933 and 1,026 euros respectively in March.

At the provincial level, the highest price again falls on Madrid (2,845 euros), followed by the province of Barcelona (2,838 euros), for which this price has become the highest since 2007. The cheapest square meters could be found in Ciudad Real (919 euros), Lugo (920 euros), Caceres (931 euros), Badajoz (933 euros) and Cuenca (936 euros).

Villanueva noted that the situation of uncertainty and crises in the global economy, taking into account the already familiar inflation and rising lending rates, are beginning to really affect world markets, including Spain. Despite the fact that the reasons for many current events lie in the decisions taken in the fall of 2022, only half a year later we see their delayed effect.

Construction and market tension

Prices for new buildings at the end of the first quarter of 2023 amounted to about 1,180 euros per square meter. There were no changes in this indicator from Q4 2022 to the end of March 2023, we are seeing some stagnation. However, compared to Q1 2022, we still see an annual growth of 6.87%. The pace of new construction is still quite low, there is a strong lack of supply on the market, so even declining demand allows prices to remain at the old levels.

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